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Limits and Cycles of Environmental Policy

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  • Thomas Wagner

Abstract

The OLG-model analyzes emissions of an accumulative pollutant in a laissez-faire economy and an economy regulated through a government controlled license market. The government either takes the price on the license market as given or sells the licenses demanded at the Cournot price. The first type of regulation is called a 'liberal environmental policy', and the second type a 'monopolistic environmental policy'. The forward looking temporary and the stationary equilibria as well as the pollution boundaries of the mechanisms are studied. If people can choose between laissez-faire and regulation (or between the liberal and the monopolistic environmental policy regime), then in general no steady state exists. Instead endogenous policy cycles can alternate between laissez-faire and regulation or between liberal and monopolistic regulation. Copyright Kluwer Academic Publishers 1998

Suggested Citation

  • Thomas Wagner, 1998. "Limits and Cycles of Environmental Policy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 11(2), pages 155-175, March.
    • Handle: RePEc:kap:enreec:v:11:y:1998:i:2:p:155-175
    DOI: 10.1023/A:1008218114525
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    Cited by:

    1. Daisuke Ikazaki, 2014. "A Human Capital Based Growth Model with Environment and Corruption," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 3(1), pages 1-13, December.
    2. Tetsuo Ono, 2009. "The political economy of environmental and social security policies: the role of environmental lobbying," Economics of Governance, Springer, vol. 10(3), pages 261-296, July.
    3. Tetsuo Ono, 2005. "The Political Economy of Environmental Taxes with an Aging Population," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 30(2), pages 165-194, February.
    4. Tetsuo Ono, 2007. "Environmental Tax Reform, Economic Growth, and Unemployment in an OLG Economy," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 63(1), pages 133-161, March.

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